Investors lament non-listing of IPOs, private placements

Investors have criticised the lukewarm attitudes of several companies towards listing their shares on the Nigerian Stock Exchange (NSE) many years after luring them to buy into their initial public offerings (IPOs) and private placements with promises of listing on the secondary market.

Retail investors who spoke with The Nation said the non-listing of the shares of the companies which had undertaken IPOs during the 2005-2008 stock market boom have locked down their funds without any verifiable means of accessing such funds.

But the Securities and Exchange Commission (SEC) said it was engaging the issuing houses that fronted for such IPOs and placements to encourage them to quicken listing of the shares.

Several private limited liability companies had converted to public limited liability companies and floated IPOs to raise funds from the capital market with assurances that they would list their shares after the conclusion of the offer.

While some have listed, many companies that floated IPOs have backed down from listing their shares citing the steeply downtrend at the stock market.

IPO is the first sale of shares by a company to the general investing public.

Shareholders said the non-listing of the shares was a breach of agreement noting that this has not only denied them the opportunity of knowing the true current worth of their investments but they have also been unable to retrieve their funds.

National President,Nigeria Shareholders Solidarity Association (NSSA),Chief Timothy Adesiyan, shareholders expect capital market regulators to have taken up the issue of listing with the companies since they also gave similar promise to the regulatory authorities when they were seeking approvals for their offers.

He noted that several shareholders were lured into buying the IPOs due to the promise of public listing on the Nigerian Stock Exchange (NSE) and resultant opportunity to trade on their investments.

According to him, it was unbecoming of the companies to raise funds from investors and refuse to subject themselves to public scrutiny by listing their shares.

“They have never called any annual general meeting; they have not paid any dividend nor make kind of return whatsoever on our money, no iota of accountability, they just sat on our money. It’s highly unbecoming and we want the regulators to do something about this,” Adesiyan said.

Citing example of a popular insurance company, Adesiyan said capital market regulators should be decisive by compelling the companies to list their shares if they refuse to heed appeals from the regulators and shareholders.

He said the sense of deception that underlined the non-listing and other revelations of shady deals in the market have adversely affected investors’ confidence in the market.

However, a director of one of the companies that had delayed listing of their shares said they took the decision to suspend listing because of the fear that the recession at the stock market might seriously undervalue the shares.

Citing other companies that had listed at IPO or above IPO prices, he noted that most of the listed IPOs have depreciated to their nominal values.

Responding to concerns over the delayed listing of previous issues, Director-General, Securities and Exchange Commission (SEC), Ms Arunma Oteh, said the Commission had interacted with the affected companies to impress it on them the imperatives of listing their shares.

According to her, the apex regulator has been engaging the issuing houses to the issues with a view to finding solutions to the problem.

She however said the Commission would not compel the companies to list noting that the companies would have to be fully prepared in terms of corporate governance and compliance before listing their shares.